Anti-Beijing protesters have held protests in Taipei against the meeting…
Chinese President Xi Jinping and Taiwan’s President Ma Ying-jeou shook hands and smiled for photographers as they entered the hotel meeting room.
China views Taiwan as a breakaway province which will one day be reunited with the mainland.
But many Taiwanese see it as independent and are concerned at China’s growing influence.
“Both sides should respect each other’s values and way of life,” Mr Ma said.
Mr Xi told the Taiwanese leader: “We are one family”.
In the Taiwanese capital, Taipei, there were protests against the talks and one group tried to enter Taiwan’s parliament building.
The awkward questions that could crop up
Relations between China and Taiwan have improved under Mr Ma since he took office in 2008, with better economic ties, improving tourism links, and a trade pact signed.
The two sides split in 1949 when the Kuomintang lost to the Chinese Communist Party in the civil war and set up a new government in Taiwan.
What won’t be discussed
No major agreements or deals are expected to be reached, and Mr Ma added that the issue of the South China Sea disputes, which has dominated recent concerns in the region, would not be brought up.
Mr Xi raised the issue in a speech at the National University of Singapore before the meeting, saying China has always hoped to settle the disputes peacefully.
What will be discussed
The meeting is taking place on the sidelines of a state visit by Mr Xi to Singapore.
In a sign of how politically sensitive it is, the leaders will address each other as Mr Xi and Mr Ma, rather than president, one Chinese government official has said.
Mr Ma has said talks would be aimed at promoting peace and finding ways to reduce hostilities, such as removing Chinese missiles targeted at Taiwan.
“We hope that the leaders of the countries will move forward and take the first step in the normalisation of ties,” he said.
Another key goal, he said, was to institutionalise meetings between the two sides, and persuade China to allow greater recognition of Taiwan in the international community.
The reaction in Taiwan and China
President Ma’s Kuomintang (KMT) Party is seen as pro-Beijing, which has led to warmer ties between the sides.
However, correspondents say growing fears over China’s influence have led to widespread dissatisfaction in Taiwan.
The KMT suffered a crushing defeat in local elections last year, a result that was widely seen as a rejection of Mr Ma’s push for closer ties with China.
AFP said there were arrests at Taipei’s Songshan airport as he left early on Saturday, where opponents of closer ties between Taiwan and China tried to set fire to images of the two leaders.
A small group supporting Mr Ma also turned up at the airport.
State media in China have heralded the meeting, though Taiwan has had a more divided reaction where opposition parties and activists have called for Mr Ma to back out.
“The Xi-Ma meeting has excited Chinese people worldwide… Applause will be heard globally for the victory of peace and rationality,” an editorial carried in the Chinese Communist Party mouthpiece People’s Daily.
It also took issue with those opposed to the meeting in Taiwan, saying critics “are displaying jiggery-pokery from a small circle. Such extremism is bound to be stigmatised”.